Black Box CEO Says Pending Sale ‘Positively Received’ By Vendors, Clients

Black Box CEO Joel Trammell told investors the response to news of the company’s agreed-upon acquisition by the Singapore subsidiary of AGC Networks, has been “positively received” by employees, vendors, and clients alike.

“We all believe it was absolutely the right thing to do for the company and its stockholders,” Trammell said during an earnings call on Friday. “I hoped this announcement would be a welcome relief to those who are concerned with our uncertainty, especially in light of the December maturity of our credit line announced in July. I have been pleasantly surprised however by the extent to which this news has been positively received by clients, team members, vendor partners, and other constituencies.”

Black Box announced Sunday it had agreed to be acquired for $16.4 million by a subsidiary of India-based AGC Networks. Under the terms of the deal, AGC would buy all outstanding Black Box shares for $1.08, 21-cents more than the stock’s closing price on the Friday before the sale was announced.

Trammell – who has been CEO of the company since November 2017 – said though earnings results for this most recent quarter ending Sept. 29 were “modest,” employees have performed well given the “numerous distractions” they faced at work.

“While these results are modest on their face, I’m very pleased with them in light of the numerous distractions and challenges that our team members have faced everyday since our “going concern” announcement last July,” Trammell said. “Our team members, day in and day out, have found ways around through and over obstacles to make sure that our clients continue to receive the high level of products and services that has become associated the the Black Box name over the last 42 years.”

Revenue for the quarter was off $5.8 million to $158.7 million, down 3.5 percent versus the same quarter last year. This was due to a decline in the company’s products business in North America. The company posted net income of $22.9 million for the quarter for an earnings per share of $1.50.

Black Box shares held steady at $1.07 today following the call.

This is the company’s 14th consecutive losing quarter. May 2015 is the last time Black Box posted quarterly revenue growth, when it announced 3 percent gains on sales of $245.1 million.